Arizona Sonoran Copper – Updated Standalone PEA On The Cactus Project Demonstrates A Post-Tax NPV8 of US$2.03 Billion and IRR of 24%

George Ogilvie, President and CEO of Arizona Sonoran Copper (TSX:ASCU – OTCQX:ASCUF), joins me to outline the updated Standalone Preliminary Economic Assessment (PEA) on the Cactus Project in Arizona, that now incorporates MainSpring, Parks-Salyer, and Cactus West & East into a larger comprehensive project. The overall Cactus Project now contains over 11 billion pounds (“lbs”)  of copper in all categories – 7.3 billion lbs of copper in measured and indicated, and 3.8 billion lbs in the inferred category.

The Cactus PEA envisages an average 86k short ton (172 million pound) per annum open pit copper heap leaching operation over a 31-year mine life (“LOM”). In total, 5.3 billion lbs or 2.7 million short tons of LME Grade A Copper Cathodes is detailed for production directly onsite via solvent extraction and electrowinning hydrometallurgical processing. The PEA supersedes the previously released Pre-Feasibility Study (PFS) in all respects, as it has now shifted from an underground mining method to an open-pit mine design.

 Highlights from the PEA:

• Key Performance Indicators at $3.90/lb Copper
  
  • $2,032 million Net Present Value (“NPV”) (8% discount, after-tax)
  • 24% Internal rate of return (“IRR”, after-tax)
  • 4.9 years Payback Period
  • $668 million development capital including contingency
• Life of Mine (“LOM”) Gross Revenue of $20.8 billion
• LOM Free Cash Flow (“FCF”) of $7,295 million (unlevered)
• Cash costs (C1) of $1.82 and All in Sustaining Costs (“AISC”) of $2.00 per pound of copper
• Financial and operational executability now through transition to Open Pit operation
  
  • 94% material from open pit mining (Cactus West and Parks/Salyer), 6% from the Stockpile and Cactus East underground
• 232 million pounds (“lbs”) (116,052 short tons (“st”)) average annual copper cathode production over the first 20 years of operation and a total of 5,339 million lbs (2,669,342 st) of copper cathode produced over the 31-year operating mine life

George outlines how the inclusion of the recently acquired and drilled out to inferred resource of the MainSpring Property, which had previously not been included in economic studies, not only brough in an additional 1.9 billion lbs of copper but was also amenable to open pit mining. This also allowed for Parks-Salyer to be transitioned into an open-pit scenario as well, bringing in an additional 1.5 billion lbs of copper into the resources, and allowed it all to be developed as an enlarged pit.  This confirms Parks/Salyer and MainSpring are now grouped together as one deposit, renamed to “Parks/Salyer.” This transition to open pit mining increases the efficiencies, improves costs, reduces capex, and takes away the need to put in the twin declines initially proposed.

There is a great deal of drilling at Mainspring being completed to move the resources from inferred to indicated, as well as more metallurgical work to prepare for incorporating all of that into a Pre-Feasibility Study (PFS), projected to come out in the summer of 2025.   We also discuss some recent drill results returned from the sulphides as Cactus West, that show the resources are continuing to grow and will either add longevity to the existing planned 31-year mine life, or provide a potential larger producer with the option of increasing the throughput in a mining scenario. Wrapping up we discuss another layer of optionality to improve the process with the investment by Nuton LLC (a wholly-owned subsidiary of Rio Tinto) and subsequent option to Joint Venture (“JV”) the Cactus Project to Nuton LLC using their proprietary leaching recovery methods.   George also provides some updates on permitting for the project, and the importance of it being on private land to help expedite the process.

If you have any follow up questions for George about Arizona Sonoran, then please email me at Shad@kereport.com  and I’ll get those forwarded along to the company.

• In full disclosure, Shad has a position in Arizona Sonoran Copper at the time of this recording.

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